As Trump's inauguration approaches, the article analyzes the potential divergence in performance between stocks and gold. While the stock market has benefited from the 'America great again' sentiment, gold, historically correlated with stocks, is showing signs of a breakout. The author suggests that this could signify a contrarian play, with gold potentially outperforming stocks as economic risks materialize.
“Predictable” taking the form of our previous “to or through the election” view for the 2024 bull, which was ginned by the Biden administration through fiscal means, and aided when theNow, with Trump’s Inauguration day nearly upon us, it is time to evaluate the next phase, which was a contrarian play where now that at least half the country thinks America is “great again” or on its way to relative greatness again, the stock market and gold may prepare to take opposite sides of that trade after...
SPX, along with other indexes, got a big boost on “America great again” day #1 and has been forming this bear pattern into AGG #2. The index is in a short-term downtrend as long as it holds below 6021. From there we have options:A healthy test of the 200 day moving average, within an uptrending bull plays out.
As to gold’s daily chart, it is said that the more times a resistance level is tested the weaker it becomes. Gold is testing resistance at 2720 for the third time right now. That could be a charm. But the proof would only be in a breakout that holds and turns resistance to support. The daily chart of gold is bullish. The big picture monthly chart of gold is and has been bullish as well, since driving toward and making the right side rim of a giant Cup in 2020.
In closing, if you have read me over the years, and especially over the last year, you know of a slew of macro indicators I use that are pointing to impending realization of risk in the stock market. Gold may or may not get pressured when that risk is realized, as it was a star participant in the 2024 global bull Olympics, after all.
GOLD STOCK MARKET ECONOMIC OPTIMISM CONTRARIAN PLAY RISK DISCLOSURE
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